Category: Ontario

GigPark – share reviews with your friends

GigPark, a Toronto, Ontario startup, has finally come out of private beta and is now live.

GigPark is a site to review and recommend local service providers amongst your friends and contacts. That means that if you hire a plumber for example, you can review his/her work and it will be shared with other people who you have friended, just like Facebook or any other number of social applications.

This is in contrast to most current review sites, which give you reviews about service providers that could be written by anyone. With GigPark you can get recommendations directly from your friends, either by viewing service providers that they have reviewed already, or by asking for a specific recommendation. Many review sites such as Amazon.com and Tripadvisor try to build the authority of the reviewer by showing you information about them (such as other reviews they have written, etc), but they remain ripe with fraudsters and hucksters and it is basically impossible to eliminate those people unless you take GigPark’s approach.

GigPark has a very tight focus and it cuts through a lot of the mess of recommending new things to friends with a clean approach that reminds me of FaceBook before they launched FB apps. GigPark has also launched a Facebook app to compliment their service. The app is much more tightly integrated with FaceBook than most apps, which is nice.

GigPark is taking a very fundamentalist approach to using the social network (or Social Graph as it now seems to be called) in their design of the service. Where it would be easy and lucrative for GigPark to find ways to publicly expose these recommendations, and it would also be profitable to resell the content, Noah and Pema assured me last week that they focus was on creating a safe and trusted space for users, and that might mean giving up some short term opportunities. That includes not selling off the reviews as “content”.
If they get a significant amount of people signed up and engaged, then this approach is going to pay off by entrenching GigPark as the most effective review site. The use of a social network gets around the significant authority and spam problems that we mentioned in our review of HomeStars. The bet is however, can they build that audience?

The hitch is that GigPark falls squarely in the YASNS category and getting people to sign up for a new site and then to have them re-create their social network is tough. The pitch is that GigPark has a very defined and obvious value, and the opportunity is huge.

GigPark is self-funded and is run by Pema Hegan and Noah Godfrey.

My profile is here, add me!

February 20, 2008
StartupCamp Waterloo 2 – Tuesday February 26th

Just a reminder that next week on Tuesday February the 26th is StartupCamp Waterloo. We will announce the next StartupCamp Toronto there and hopefully a few other things as well.

Austin Hill will be kicking things off and I expect that the pitches will be as much fun as last time. The thing I really liked about StartupCampWaterloo (and what we tried to achieve in Toronto) was how laid back things were and how “green” the pitches were.

I can’t wait to hang out and meet some more aspiring Waterloo startups.

February 17, 2008
It's a wrap – Founders and Funders Toronto

The inaugural Founders & Funders went off without a hitch. It was a fantastic evening. It wouldn’t have been possible without our sponsors, thank you very much Microsoft and JLA Ventures, the event wouldn’t have happened without their support.

Jess and Chris from Istoica snapped a fantastic pictures of the event and the attendees. The gallery from Founders & Funders event is available. Maybe we should do a set of hockey cards of Founders & Funders. On the back of each card it could have stats like amount raised, fund size, number of deals, etc. Until then, check out the pictures from Istoica.

The goal of Founders & Funders is to create a social environment where the people who fund companies and the people who start companies can begin conversations outside of the pitch. As an attendee, I’ll extend an invitation to connect you with any other attendee you might have missed.

Thank you for making the inaugural Toronto Founders & Funders a success. We look forward to hosting another event later in 2008.

Cheers,
David & Jevon

January 25, 2008
Game On Finance – Browser going to wallop Super Mario

Last week we got our finance on at Game On, a top notch event by Interactive Ontario that brought together thought leaders from the games business. Right from the start it was apparent the games industry is incredibly diverse.

Over half the attendees were in the console game business, by and large a mature industry. More than a few people didn?t appreciate their industry being called mature? but what else can you call it when $15 million is required to create a new console title and there is virtually no way to get a project financed without the backing of an established publisher like Ubisoft or EA. “The large investments required rule out venture capital interest” noted Randy Thompson of Argon Venture Partners, so financing a title more closely resembles feature film (without the promise of Hollywood glamour). Eric Zimmerman, Co-Founder of Gamelab, made a particularly incisive point by posing the question ?do ever more realistic lumbering 3d giants really drive greater entertainment value??

Also in attendance were developers of mobile games. The mobile games business is currently controlled by carriers who use their decks (the preset homepage and application managers) to strong arm developers, control billing, limit distribution, and take a hefty cut. The challenges of mobile game developers are many, perhaps the most significant being porting (ensuring a game will work on the 1,500+ mobile phones on the market). Phil Giroux of Magmic Games, one of the most successful mobile game companies out there, noted Magmic spends significantly more time porting than creating new titles. There are definitely some opportunities in the mobile space for startups, but my guess is that they involve less game development and more figuring out how to ensure games work across devices. How many of you have tried entering the mobile application space? Have any of you succeeded?

By far the most exciting space at least as far as startups are concerned is internet gaming. The flash enabled browser represents a distribution channel larger than xbox, playstation, and wii combined. There are of course challenges, internet users have grown accustomed to free. John Walsh, CEO of Groove Media, really blew the crowd away with their plan to monetize free games with in-game advertising and upgrades. Others must also be impressed, the Toronto based Groove Media has already raised $30 million, talk about taking it to the next level!

We met a great group of Canadian entrepreneurs at Game On Finance. Vikas Gupta of Transgaming Technologies, John Walsh of Groove Media, and Nathan Gunn of BitCasters. We?ll be following up with profiles of each over the next few weeks, cause one thing is for sure, Canadian entrepreneurs will be behind the next revolution in gaming.

January 25, 2008
smartpatterns.com – Create your own Knitting Pattern

I wasn’t exactly sure what to think when I first took a look at smartpatterns.com, a Waterloo, On startup that has 2 employees and has been in development since 2003. Smartpatterns is a windows application, not a web application, that lets you create knitting patterns using a drag-and-drop interface.

Once you have created an image of the sweater you want, and have added the proper measurements as well, the software will produce a standard knitting pattern that will let even an amateur create a complex piece, such as a sweater.

Etsy.com is a great example of how a company can build and leverage an Arts and Crafts community in order to build a healthy market. I think SmartPatterns, with their knitting-specific tools, has a huge opportunity to create a market for custom-made knitted items. This might sound crazy to some, but there might be a market for it: On-Demand custom knitted sweaters, scarfs, afghans and more.

One thing I loved about Indochino was their on-demand access to production labour that allows them to create tailored suits on demand. In that case, Indochino outsources to specific tailors in China.

I don’t know a lot of knitters, but the ones I do know all love to create things for their friends and family. I can imagine that they might enjoy getting paid to knit just as much. A sort of return to a more primitive economy, but with all the efficiencies and possibilities of a piece of custom-design software like SmartPatterns.

The opportunity for SmartPatterns is to provide their software so people can design the perfect item and then SmartPatterns provides the knitting pattern to the knitter, who will produce the item and then ship it to the buyer directly.

Is there are market for custom-made knitted goods? I am not sure, but I am convinced that it is far more scalable and profitable to become a platform for a market than it is to simply be selling software to a small community of users. That said, SmartPatterns seems to have a solid tool that produces solid results for their users. That can’t be underestimated.

Since their launch in December, SmartPatterns has brought in over 1000 paying customers and they have sold their first pattern to a yarn manufacturer (which I understand gets included in the yarn as a perk). That shows me that there is a huge need for their core product and that their opportunities to generate more profit, such as the way I suggest, could be something they experiment with as they grow their core market.

SmartPatterns is Angel funded, but is currently seeking a new round of funding.

January 23, 2008
AnnesDiary.com – Anne of Green Gables gets Fingerprinted

AnnesDiary.com, run by Toronto based LogicaHoldings, is taking a Webkinz style approach to the children’s online entertainment market. Their twist? A fingerprint scanner!

To sign up a child for Anne’s Diary a parent must fill out an application and provide contact information for a sponsor who can attest to the child’s gender (female) and age (6-14). A sponsor must meet several requirements, the most curious being that he or she must be a recognized professional from a list of 46 including: Funeral Director, Christian Science Practitioner, and Member of Parliament.

2-3 weeks later two packages will arrive: a welcome kit (which includes a fingerprint scanner and a copy of the book Anne of Green Gables) at the parents home and a password card at the sponsors home. The sponsor then must call the parents to reveal the password. And that is just the sponsorship piece.

You’ll also have to install the fingerprint scanner and scan a few of your child’s fingerprints (in case the child looses or injures one finger)! All this adds up to a few things not the least of which is a barrier to adoption.

A subscription to Anne’s Diary costs $119.99 a year. For comparisons sake, Club Penguin costs $60 a year and Webkinz $15. The games on Club Penguin are actually pretty fun and you get to play with other penguins! With Webkinz, you get a physical stuffed animal even before you register!

With Anne’s Diary, you get an online journal (more fun than MS Word) and every Christmas a print out of all the journal entries (sweater alert). There are some more features: a few solo games, a birthday calendar, an amazon affiliate site, and a basic instant messenger.

So what does being “the first biometrically-secured social networking site for children in the world” mean in terms of security? We’re not exactly sure… The issue is content not authentication. What’s to stop Uncle Lester from using a logged in but unattended computer?

Monitoring the chat, blocking certain words, and regularly booting bullies should be enough, which is by the way what they do on Club Penguin (now a Walt Disney Company). Anne’s Diary claims to block out dirty words, but using their demo account I was able to draft my own version of The Aristocrats.

Club Penguin and others have proven that there is a huge market in this demographic and that parents absolutely will pay for security and a solid product. The Anne of Green Gables brand license is certainly valuable, time will tell if Logica Holdings is in this for the long haul. Losing the sponsor process and fingerprint scanner would be a good start.

“Marilla, isn’t it nice to think that tomorrow is a new day with no mistakes in it yet?” – Anne Shirley

January 16, 2008
Overlay.TV lands a $4,600,000 Series A

Celtic House Venture Partners, EdgeStone Capital Partners and Tech Capital Partners announced today a Series A investment of $4,600,000 in Overlay.TV.

The company, based in Ottawa, is building out an internet video-advertising platform that allows viewers to interact with online video, and enables content owners and distributors to monetize videos. Videos stream from their original location (e.g. youtube) and viewers are able to opt-in to receive overlays with contextual information and links (e.g. affiliate shops).

Stay tuned for a full review following the official launch February 14, 2008.

January 15, 2008
Founders and Funders is a sellout, then on to Montreal
Founders and Funders Toronto is just about sold out and we have a waiting list of 60+ people. It is shaping up to be a great evening. I can’t believe it came together so quickly. It was just a few weeks ago that David and I were talking about it. I also want to thank David for his hard work on this, we have both been pretty busy with other things and David has definitely been the leader on getting F&F together.

People are coming in from all over the country for the dinner it seems, and there is a great core of Toronto funders and entrepreneurs who will be there. Keep an eye on the Founders and Funders website for more announcements. Also, a big thank you to our sponsors: Microsoft Mix and JLA Ventures.

Then, we hop in the car, plane or train and head to Montreal:

StartupCamp Montreal – January 23rd

StartupCampMontréal is scheduled next Wednesday 23rd at la SAT, from 6pm to 10pm. This is really coming together. I can’t get over how many great startups have applied to present. Montreal is absolutely buzzing these days. The event is totally sold out except for a few service provider tickets.

I am looking forward to meeting as many people as possible while I am in town.

5 startups were selected from the votes of 27 gurus:
- Tungle: Easy appointment scheduling for groups
- Cozimo: Real Time collaboration for designers
- Streametrics: Provides metrics on the use of video on the web for publishers
- yourteledoctor: Virtual visits with a doctor via the internet.
- Igotcha Meda: Ad network
January 15, 2008
The Do's and Don'ts of Raising Capital

The Wellington Financial Blog is probably one of the most underrated in Canada. Not only are these guys the real-deal, but they have some serious guts and don’t pull punches for anyone.

Yesterday they published a great but simple list: The Do’s and Don’ts of Raising Capital. The blog is not startup focused specifically, you can think of it as a Bay Street version of StartupNorth, but the topics are worth reading about when you have time. They also have the occasional scoop on Bay Street gossip, like today’s (or should I say, yesterday’s, or last month’s) CIBC news.

Do?s:

1. When you ask to meet with an prospective investor, have a defined amount or money in mind, or at least a range, and know what the use of proceeds will be.

2. Prepare an overview, and there?s nothing wrong with PowerPoint. The pitch can be 15-25 slides long. No one needs a 50 page deck for the first meeting; there?s no way you?ll get through it all during the first session in any event (see below).

3. Ask for 60 minutes, and no more. That should be all that you need for the 1st meeting.

4. Show up on time.

5. If you are bringing your own laptop, make sure you know what you plan to do with it during the meeting: run the show on a wall, link in to an overhead projector, etc.

6. If you feel you need a non-disclosure agreement executed prior to the meeting, don?t be surprised that the prospective investor might want you to sign their own – rather than yours. If you see 100 or more companies a year, you can imagine how hard it would be for the investor to execute 100 different NDAs.

7. Review the website of the investor prior to the meeting. If you don?t know what type of firm it is (equity vs. debt vs. LSIF vs. agent vs. principal), you might be wasting your time – and theirs.

8. If you are going to engage an agent, make sure you know what role you want them to play. Some deals benefit from an outside advisor, and some may not. As much as VCs don?t like to think that entrepreneurs feel the need to spend part of the raise on fees, one wouldn?t do a deal with lawyers or accountants. But if you get an agent involved (and sometimes that agent/advisor can also be a lawyer or an accountant if they have the specific expertise), use them for the hard stuff, like telling you what is practical on the key negotiating items, what?s ?market?, and so forth.

9. If you get a term sheet and are trying to compare one investor?s proposal to another, make sure you ask about prior deal references. The price/terms of a deal are only part of the decision-making process, or at least they shouldn?t be the sole criteria. Ask to speak to a couple of prior investee companies, and ask how many deals have closed in the past year or two. Do at least some due diligence on the group you are talking to, as not all teams/funds are the same – by a long shot.

Don?ts:

1. Don?t send a 10 page NDA to a firm. This is the deal: we investors promise to not steal your idea or tell a competitor about it. We promise to keep your private data private. We promise not to poach staff we meet during the process. That shouldn?t take 10 pages to document.

2. Don?t ask for a meeting, pitch your story, and show a forecast that ?isn?t board approved?. If you aren?t yet ready to raise capital, why ask for the meeting?

3. Don?t go into a pitch without knowing ?where your existing investors live?. That?s code for: know whether or not the current investors will play on the upcoming round or not.

4. Don?t send a PDF of your financial model. It?ll only make the investor wonder why you don?t want to share the working excel version.

5. If you are raising anything post an Angel round, don?t ask for a meeting if you don?t have a financial model ready. Having a pitch meeting and then sending a model a couple of weeks later ensures that 1) the iron may now no longer be hot, 2) the VC might have come to an uneducated, yet quick, no, or 3) you?ll seem disorganized, which may be normal for early stage companies but not a confidence-builder.

6. Don?t compare yourself to Google, as in: ?What we?re doing is more robust than Google?, ?What we?re doing is harder than Google?, or ?We are going to be the next Google?.

7. Don?t bring five or six company people to the first meeting. There are rarely enough chairs anyway, and don?t some of these people have jobs that don?t involve raising capital?

8. Don?t say you?ll send follow-up material ?in a couple of days?, and then go silent for several weeks. If you ask for a meeting to raise capital, and the prospective investor is interested, be conscious that they see 500 or more ideas a year and can?t possibly waste five minutes let alone a couple of hours.

9. When you do send forecasts, don?t send a budget that shows revenue going from, say, $1 million this year to $100 million in three years? time. People will think – fair or not – that you?ve lost your mind.

10. When talking future valuation, don?t use numbers that involve ?billions?. As in, ?We?ll be worth north of a billion by 2012?. People will think – fair or not – that you?re on crack.

11. Don?t be offended if the investor turns you down, as long as they are polite about it.

January 15, 2008
TIEQuest Business Plan Competition – Deadline January 31st

In case you weren’t already aware, TIE Toronto (an entrepreneur support group in Toronto) is holding TIEQuest.

TIEQuest is a business plan competition which promises that “the winners will receive an ?Expression of Interest? for up to $1 million of investment from sponsoring firms and various cash prizes and incentives exceeding $150,000 in value.” The overall winner gets an immediate $50,000 prize along with the $1,000,000 prize.

If any of you are going to participate in this, let us know, we’d love to keep an eye on it.

January 14, 2008